Initialize Balances in New Reporting Currencies or Secondary Ledgers

Here are the tasks for initializing balances in a new reporting currency or secondary ledger, also known as the target ledger.

1. Determine the initialization period.
2. Set up balance initialization.
3. Assign data access sets.
4. Stop journal posting in the source ledger.
5. Open periods in the new target ledgers.
6. Run the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process.

Caution: It’s strongly recommended that you first generate and verify the opening balance journals in a test instance.

Determine the Initialization Period

The balance initialization period is the first accounting period for which you want to be able to report transactions and balances in your new reporting currencies or secondary ledgers.

It’s also the first future enterable or never opened period of the corresponding source ledger. If the calendars between the source and target ledgers are different, then the start date of the period in the target ledger must be the same as the start date of the first future enterable or never opened period of the source ledger.

Note: It’s strongly recommended that you plan to run the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process as close as possible to the end of the period that precedes the initialization period.

When determining what period to use for your initialization period, consider these points.

• From a business perspective, when do you want to begin reporting account balances in your reporting currencies or secondary ledgers? If the balance initialization periods are different for each of your ledgers, you should consider a phased implementation of reporting currencies or secondary ledgers.
• When does your accounting calendar begin? Reporting currencies or secondary ledgers can be enabled at any time.
• Are you operating in a country that's a member of the EMU? If so, coordinate your choice of the balance initialization period with your planned implementation of Euro accounting and reporting.

The Create Opening Balance Journals in Reporting Currency or Secondary Ledger process will validate that the balance initialization period is the first future enterable period or, if you don't allow future enterable periods, the first never opened period in the source ledger. If it isn’t, the process ends in error, without converting any of your account balances.

For example, assume you’re planning to perform a reporting currency implementation in March 2023, where March 1, 2023 is the first day of the balance initialization period. You've made sure that March 2023 is the first future enterable period or, if you don’t allow future enterable periods, it’s the first never opened period in the source ledger. Also assume that before you run the process, you open additional accounting periods such that March 2023 is no longer the first future enterable period or, if you don’t allow future enterable periods, the first never opened period in the source ledger.

As a result of opening the new periods, March 2023 can no longer be your balance initialization period. You won’t be able to perform the balance initialization process with March 2023 as your balance initialization period. You must ensure that the new period you choose will be the first future enterable period or first never opened period in the source ledger when you run the process.

Set Up Balance Initialization

Navigate to the Setup and Maintenance work area to set up balance initialization for new target ledgers.

For new reporting currencies, use the Manage Reporting Currencies task in the General Ledger functional area, with the scope set to the source ledger. For new secondary ledgers, use the Specify Ledger Options task in the General Ledger functional area, with the scope set to the secondary ledger.

This table describes the fields in the Balance Initialization section in the Create or Edit Reporting Currency and the Specify Ledger Options pages.

Field	Description
Period	The first future enterable or, if you don’t allow future enterable periods, the first never opened period in the source ledger. It can be an adjustment period. The field will be prepopulated with the value.
Conversion Date	The date used in conjunction with the conversion rate type to identify the rate for initializing the balances. The default value is the last date of the period that precedes the initialization period. You can enter any date that’s before the first date of the initialization period.
Conversion Rate Type	The type of rate for the conversion date that’s used to initialize balances from the source to the target ledger. It’s recommended that you define new conversion rate types to use specifically for the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process. Don’t use the conversion rate types that you use for normal transaction processing, which includes foreign currency transactions entered in your ledger and all transactions that reporting currencies convert after the process has completed successfully.

Note: In the case of ledgers with an EMU relationship, only the Period parameter will appear and is applicable because the conversion rate is dynamically selected by the application for fixed relationships. Transactions between European union members have fixed relationships, so if the source and target ledgers have EMU fixed relationship currencies, then the transaction or initialization between the source and target ledger is considered to be an EMU relationship.

Here are some additional points on the Period field.

• For new secondary ledgers with a different accounting calendar, this is the secondary ledger period whose start date matches the start date of the first future enterable or never opened period of the primary ledger. If such a period doesn’t exist in the secondary ledger, the Period field will be blank.
• If the period you select is no longer in a future enterable or never opened status in the source ledger at the time you submit the process, the process will end in a warning. It’s recommended that you put procedures in place to ensure the initialization period will still meet the criteria when you run the process.
• Batches posted to the adjustment period preceding the initialization period in the source ledger before the balance initialization aren't considered by the balance initialization process.

Assign Data Access Sets

Assign users full access to the target ledgers before running the balance initialization process.

Stop Journal Posting in Source Ledger

You must suspend all journal posting in the source ledger before you run the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process.

Also don’t post journals when the process is running. You should stop posting any journals in the target ledger and ideally you should initialize balances before posting any journals in the target ledger. If there are replicated journals from the source ledger that aren’t posted, then the balance initialization process will end in warning.

Open Periods in New Target Ledgers

Before running the initialization process, open the period in the reporting currency or secondary ledger that’s immediately prior to the specified balance initialization period.

Run the Create Opening Balance Journals in Reporting Currency or Secondary Ledger Process

Initialize balances by submitting the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process.

Note: To submit the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process, you need the existing privilege Run Create Opening Balance Journals in Reporting Currency Program (GL_RUN_CREATE_OPENING_BALANCE_JOURNALS_IN_REPORTING_CURRENCY_PROGRAM_PRIV).

Here are the parameters for the process.

• Source Ledger: The list displays all primary and secondary ledgers with at least one associated journal-level or subledger-level reporting currency or secondary ledger, where the user submitting the process has at least read access.
• Target Ledger: The list displays all secondary ledgers and reporting currencies where the user submitting the process has full access and the initialization setup has been defined on the Specify Ledger Options or, Create or Edit Reporting Currency pages, respectively.
• Create Journal Batches by Primary Balancing Segment Values
  • If not selected, the process generates one journal batch for Actual balances, that is, a single batch with one journal header with multiple currencies and multiple primary balancing segments. If you’re using Encumbrance Accounting, the process generates one journal batch for Encumbrance balances, that is, a single batch with one journal header with multiple currencies and multiple primary balancing segments.
  • If selected, the process generates one journal batch per primary balancing segment value for Actual balances, that is, a single batch with one journal header and with a single primary balancing segment value with multiple currencies. If you’re using Encumbrance Accounting, the process generates one journal batch per primary balancing segment value for Encumbrance balances, that is, a single batch with one journal header and with a single primary balancing segment value with multiple currencies.
  Note: If sequencing by legal entity is enabled for the target ledger, then the initialization process splits journals by legal entity, even if the Create Journal Batches by Primary Balancing Segment check box isn’t selected.
• Account Filter: An optional flexfield filter for all chart of account segments. Determine whether to initialize all ledger account balances or only a specific range of accounts. Be careful when choosing to initialize only a range of accounts because your source ledger and target ledgers might not be synchronized and reconcilable after you run the process.
  Note: The supported operators are Between, Is a descendant of, and Equals.
• Conversion Start Period: This parameter is only applicable for source and target ledgers with an Economic and Monetary Union (EMU) relationship. You can choose a conversion start period to determine the number of periods before the initialization period for which you want to convert account balances. It’s recommended that you select an initialization period based on when you want to start inquiring and reporting on period-to-date account balances in your target ledgers.

Once the process is completed and the journals are imported, you can review the journals from the Manage Journals page and post them in the initialization period.